Your credit score gets the headlines. Your DTI quietly decides whether you actually get the loan.
Some calculations matter for a single decision; this one matters for years. Your credit score gets the headlines. Your DTI quietly decides whether you actually get the loan.
DTI = total monthly debt payments / gross monthly income × 100
Front-end DTI includes housing only. Back-end includes everything (housing, car, cards, student loans).
Mortgages typically cap back-end DTI at 43% (qualified mortgage rule). Best rates go to borrowers under 36%.
Pay down highest-payment debt (not highest-rate — DTI cares about the payment), or increase income.
Does rent count in DTI? When buying a home, your projected mortgage replaces rent. For other loans, current rent counts.
What's a healthy personal DTI? Below 28% front-end, below 36% back-end. Above 43% you'll struggle to get loans.
The math is the easy part. Acting on what it tells you is where the real win lives.